[X]
|
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES
|
EXCHANGE
ACT OF 1934
|
[ ]
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
|
SECURITIES
EXCHANGE ACT OF 1934
|
Illinois
|
36-2863847
|
|
(State
of Incorporation)
|
(I.R.S.
Employer
|
|
Identification
Number)
|
||
1844
Ferry Road
|
||
Naperville,
Illinois 60563-9600
|
(630)
983-8888
|
|
(Address
of principal executive offices)
|
(Registrant’s
telephone number)
|
Item
No.
|
Description
|
Page
No.
|
|||||
Glossary
|
ii
|
||||||
Part
I
|
|||||||
1.
|
1
|
||||||
1A.
|
4
|
||||||
1B.
|
7
|
||||||
2.
|
7
|
||||||
3.
|
8
|
||||||
4.
|
Submission
of Matters to a Vote of Security Holders
|
*
|
|||||
Part
II
|
|||||||
5.
|
8
|
||||||
6.
|
Selected
Financial Data
|
*
|
|||||
7.
|
8
|
||||||
7A.
|
21
|
||||||
8.
|
23
|
||||||
9.
|
50
|
||||||
9A.
|
50
|
||||||
9B.
|
51
|
||||||
Part
III
|
|||||||
10.
|
Directors,
Executive Officers and Corporate Governance
|
*
|
|||||
11.
|
Executive
Compensation
|
*
|
|||||
12.
|
Security
Ownership of Certain Beneficial Owners and Management and
Related
Stockholder Matters
|
*
|
|||||
13.
|
Certain
Relationships and Related Transactions, and Director
Independence
|
*
|
|||||
14.
|
52
|
||||||
Part
IV
|
|||||||
15.
|
53
|
||||||
55
|
|||||||
56
|
|||||||
57
|
*
|
The
Registrant meets the conditions set forth in General Instruction I(1)(a)
and (b) of Form 10-K and is therefore omitting the information called for
by the otherwise required item.
|
Item
1.
|
Availability
|
Contract
Expiration
|
||||
Natural
Gas Pipeline Company (NGPL)
|
968,000 |
Various
dates through March 2012
|
|||
Horizon
Pipeline
|
300,000 |
May
2012
|
|||
Tennessee
Gas Pipeline Company (TGPC)
|
203,000 |
October
2009
|
|||
Midwestern
Gas Transmission Company
|
247,000 |
October
2009
|
|||
Northern
Natural Gas Company
|
206,000 |
October
2011
|
|||
ANR
Pipeline
|
125,000 |
Various
dates through October 2012
|
|||
Texas
Gas
|
47,000 |
March
2009
|
·
|
Base
rates, which are set by the ICC, are designed to allow the company an
opportunity to recover its costs and earn a fair return for
investors. In the fourth quarter of 2005, the company received
approval from the ICC for a base rate increase. For additional
information about the rate order, see Item 7 – Management’s Discussion and
Analysis of Financial Condition and Results of Operations and Item 8 –
Notes to the Consolidated Financial Statements – Note 14 – Rate
Proceeding.
|
·
|
The
company’s ICC-approved tariffs provide that the cost of natural gas
purchased for customers will be fully charged to customers without
markup. Therefore, the company does not profit from the sale of
natural gas. Rather, the company earns income from fixed
monthly charges and from variable transportation charges for delivering
natural gas to customers. Annually, the ICC initiates a review
of the company’s natural gas purchasing practices for prudence, and may
disallow the pass-through of costs considered
imprudent.
|
·
|
As
with the cost of natural gas, the company has a tariff that provides for
the pass-through of prudently incurred environmental costs related to
former manufactured gas plant sites. This pass-through is also
subject to annual ICC review.
|
Item
1B.
|
2007
|
2006
|
2005
|
||||||||||
Revenues
|
$ | 2,627.5 | $ | 2,452.3 | $ | 2,909.6 | ||||||
Cost
of gas
|
(1,906.5 | ) | (1,743.7 | ) | (2,212.4 | ) | ||||||
Revenue
tax expense
|
(148.7 | ) | (144.4 | ) | (152.0 | ) | ||||||
Margin
|
$ | 572.3 | $ | 564.2 | $ | 545.2 |
Standard
&
Poor’s
|
Moody’s
|
Fitch
|
||||
Commercial
Paper
|
A-1+ | P-1 | F-1 | |||
Senior
Secured Debt
|
AA
|
A1 | AA- | |||
Senior
Unsecured Debt
|
AA- | A2 | A+ | |||
Corporate
Credit Rating
|
AA | n/a | n/a |
Payments due by period | ||||||||||||||||||||
Less
than
1
year
|
1-3
years
|
3-5
years
|
More
than
5
years
|
Total
|
||||||||||||||||
Purchase
obligations
|
$ | 758.3 | $ | 212.1 | $ | 32.7 | $ | 2.9 | $ | 1,006.0 | ||||||||||
Long-term
debt
|
75.0 | 50.0 | 75.0 | 300.0 | 500.0 | |||||||||||||||
Fixed
interest on
long-term
debt
|
29.0 | 47.4 | 37.6 | 284.1 | 398.1 | |||||||||||||||
Operating
leases
|
1.1 | .9 | .8 | 8.9 | 11.7 | |||||||||||||||
Other
long-term obligations
|
.5 | 1.0 | .4 | 1.4 | 3.3 | |||||||||||||||
$ | 863.9 | $ | 311.4 | $ | 146.5 | $ | 597.3 | $ | 1,919.1 |
Page
|
||||
24
|
||||
Financial
Statements:
|
||||
26
|
||||
27
|
||||
28
|
||||
29
|
||||
30
|
||||
30
|
||||
31
|
2007
|
2006
|
|||||||
Regulatory
assets
|
||||||||
Regulatory
postretirement asset - current
|
$ | 5.2 | $ | 8.8 | ||||
Regulatory
postretirement asset - noncurrent
|
64.2 | 104.7 | ||||||
Deferred
environmental costs
|
9.5 | 16.0 | ||||||
Unamortized
losses on reacquired debt
|
16.5 | 17.6 | ||||||
Deferred
rate case costs
|
2.6 | 3.0 | ||||||
Other
|
.1 | 1.0 | ||||||
$ |
98.1
|
$ | 151.1 |
2007
|
2006
|
|||||||
Regulatory
liabilities
|
||||||||
Regulatory
asset retirement cost liability – current
|
$ | 8.0 | $ | 8.0 | ||||
Regulatory
asset retirement cost liability – noncurrent
|
720.7 | 676.7 | ||||||
Accrued
gas costs
|
50.1 | 50.0 | ||||||
Regulatory
income tax liability
|
49.5 | 53.8 | ||||||
Other
|
1.1 | - | ||||||
$ | 829.4 | $ | 788.5 |
2007
|
2006
|
|||||||
Beginning
of period
|
$ | 170.2 | $ | 164.4 | ||||
Liabilities incurred during the period
|
2.3 | 2.2 | ||||||
Liabilities settled during the period
|
(3.2 | ) | (3.2 | ) | ||||
Accretion
|
9.7 | 9.5 | ||||||
Revision in estimated cash flows
|
- | (2.7 | ) | |||||
End
of period
|
$ | 179.0 | $ | 170.2 |
2007
|
2006
|
|||||||
Current
other assets
|
$ | 1.8 | $ | .3 | ||||
Noncurrent
other assets
|
.3 | .1 | ||||||
$ | 2.1 | $ | .4 | |||||
Derivative
instruments
|
$ | 5.7 | $ | 48.0 | ||||
Noncurrent
other liabilities
|
.1 | .7 | ||||||
$ | 5.8 | $ | 48.7 |
8.
|
INCOME
TAXES
|
2007
|
2006
|
2005
|
||||||||||
Current
|
||||||||||||
Federal
|
$ | 30.9 | $ | 62.0 | $ | 87.1 | ||||||
State
|
5.7 | 16.5 | 20.4 | |||||||||
36.6 | 78.5 | 107.5 | ||||||||||
Deferred
|
||||||||||||
Federal
|
(1.4 | ) | (37.6 | ) | (64.0 | ) | ||||||
State
|
1.1 | (11.0 | ) | (15.3 | ) | |||||||
(0.3 | ) | (48.6 | ) | (79.3 | ) | |||||||
Amortization
of investment tax credits, net
|
(2.1 | ) | (2.1 | ) | (2.1 | ) | ||||||
Income
tax expense, net
|
$ | 34.2 | $ | 27.8 | $ | 26.1 |
2007
|
2006
|
|||||||
Deferred
tax liabilities
|
||||||||
Property,
plant and equipment
|
$ | 286.2 | $ | 287.6 | ||||
Employee
benefits
|
15.0 | 14.8 | ||||||
Other
|
16.4 | 19.4 | ||||||
317.6 | 321.8 | |||||||
Deferred
tax assets
|
||||||||
Unamortized
investment tax credits
|
18.1 | 19.5 | ||||||
Other
|
40.0 | 45.7 | ||||||
58.1 | 65.2 | |||||||
Net
deferred tax liability
|
$ | 259.5 | $ | 256.6 |
2007
|
2006
|
2005
|
||||||||||
Federal
statutory rate
|
35.0% | 35.0% | 35.0% | |||||||||
State
income taxes, net
|
4.6 | 4.4 | 4.6 | |||||||||
Amortization
of investment tax credits
|
(2.2) | (2.6) | (3.0) | |||||||||
Amortization
of regulatory income tax liability
|
(1.7) | (1.7) | (2.3) | |||||||||
Medicare
subsidy
|
(1.4) | (2.1) | (1.1) | |||||||||
Other,
net
|
(.3) | (.8) | (.4) | |||||||||
Effective
combined federal and state income tax rate
|
34.0% | 32.2% | 32.8% |
Balance
at January 1, 2007
|
$ | .7 | ||
Settlements
|
(.1 | ) | ||
Balance
at December 31, 2007
|
$ | .6 |
9.
|
POSTRETIREMENT
BENEFITS
|
Pension
benefits
|
Health
care and
other
benefits
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Change
in benefit obligation
|
||||||||||||||||
Benefit
obligation at beginning of period
|
$ | 271.3 | $ | 284.4 | $ | 193.7 | $ | 192.5 | ||||||||
Service
cost
|
9.1 | 9.4 | 2.3 | 2.4 | ||||||||||||
Interest
cost
|
15.1 | 14.9 | 10.9 | 10.3 | ||||||||||||
Actuarial
(gain) loss
|
(15.2 | ) | (9.7 | ) | 1.3 | .4 | ||||||||||
Participant
contributions
|
- | - | 1.1 | .7 | ||||||||||||
Medicare
Part D reimbursements
|
- | - | 1.2 | - | ||||||||||||
Benefits
paid
|
(17.1 | ) | (27.7 | ) | (13.6 | ) | (12.6 | ) | ||||||||
Benefit
obligation at end of period
|
263.2 | 271.3 | 196.9 | 193.7 |
Pension
benefits
|
Health
care and
other
benefits
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Change
in plan assets
|
||||||||||||||||
Fair
value of plan assets at beginning of period
|
432.3 | 424.0 | 1.2 | 6.9 | ||||||||||||
Actual
return on plan assets
|
63.5 | 36.0 | - | .2 | ||||||||||||
Employer
contributions
|
- | - | 11.3 | 6.0 | ||||||||||||
Participant
contributions
|
- | - | 1.1 | .7 | ||||||||||||
Benefits
paid
|
(17.1 | ) | (27.7 | ) | (13.6 | ) | (12.6 | ) | ||||||||
Fair
value of plan assets at end of period
|
478.7 | 432.3 | - | 1.2 | ||||||||||||
Funded
status
|
215.5 | 161.0 | (196.9 | ) | (192.5 | ) | ||||||||||
Contributions
made after the measurement date
|
- | - | 2.3 | 3.0 | ||||||||||||
Other
|
- | - | (.9 | ) | (1.2 | ) | ||||||||||
Postretirement
benefit asset (liability)
|
$ | 215.5 | $ | 161.0 | $ | (195.5 | ) | $ | (190.7 | ) |
Pension
benefits
|
Health
care and
other
benefits
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Noncurrent
assets
|
$ | 215.5 | $ | 161.0 | $ | - | $ | - | ||||||||
Current
liabilities
|
- | - | (10.4 | ) | (9.1 | ) | ||||||||||
Noncurrent
liabilities
|
- | - | (185.1 | ) | (181.6 | ) | ||||||||||
$ | 215.5 | $ | 161.0 | $ | (195.5 | ) | $ | (190.7 | ) |
Net
regulatory assets
|
Accumulated
other
comprehensive
income
|
Total
|
||||||||||||||||||||||
Pension
benefits
|
Health
care
and
other
benefits
|
Pension
benefits
|
Health
care
and
other
benefits
|
Pension
benefits
|
Health
care
and
other
benefits
|
|||||||||||||||||||
January
1, 2007
|
$ | 34.6 | $ | 78.2 | $ | 1.8 | $ | 4.2 | $ | 36.4 | $ | 82.4 | ||||||||||||
Arising
during period:
|
||||||||||||||||||||||||
Net actuarial (gain)
loss
|
(40.5 | ) | 1.3 | (2.1 | ) | - | (42.6 | ) | 1.3 | |||||||||||||||
Amortized
to net periodic benefit cost (credit):
|
||||||||||||||||||||||||
Net actuarial
loss
|
- | (4.5 | ) | - | (.2 | ) | - | (4.7 | ) | |||||||||||||||
Net prior service (cost)
benefit
|
(.5 | ) | .1 | - | - | (.5 | ) | .1 | ||||||||||||||||
December
31, 2007
|
$ | (6.4 | ) | $ | 75.1 | $ | (.3 | ) | $ | 4.0 | $ | (6.7 | ) | $ | 79.1 |
Net
regulatory assets
|
Accumulated
other
comprehensive
income
|
Total
|
||||||||||||||||||||||
Pension
benefits
|
Health
care
and
other
benefits
|
Pension
benefits
|
Health
care
and
other
benefits
|
Pension
benefits
|
Health
care
and
other
benefits
|
|||||||||||||||||||
Net
actuarial loss
|
$ | - | $ | 4.4 | $ | - | $ | .2 | $ | - | $ | 4.6 | ||||||||||||
Net
prior service cost (benefit)
|
.4 | (.1 | ) | - | - | .4 | (.1 | ) | ||||||||||||||||
$ | .4 | $ | 4.3 | $ | - | $ | .2 | $ | .4 | $ | 4.5 |
Pension
benefits
|
Health
care and
other
benefits
|
|||||||||||||||||||||||
2007
|
2006
|
2005
|
2007
|
2006
|
2005
|
|||||||||||||||||||
Service
cost
|
$ | 9.1 | $ | 9.4 | $ | 9.3 | $ | 2.3 | $ | 2.4 | $ | 2.7 | ||||||||||||
Interest
cost
|
15.1 | 14.9 | 15.6 | 10.9 | 10.3 | 10.3 | ||||||||||||||||||
Expected
return on plan assets
|
(36.0 | ) | (34.8 | ) | (33.2 | ) | - | (.2 | ) | (.9 | ) | |||||||||||||
Recognized
net actuarial loss
|
- | .2 | 1.6 | 4.7 | 5.0 | 4.9 | ||||||||||||||||||
Amortization
of prior service cost
|
.5 | .5 | .6 | (.1 | ) | (.1 | ) | (.1 | ) | |||||||||||||||
Net
periodic benefit cost (credit)
|
$ | (11.3 | ) | $ | (9.8 | ) | $ | (6.1 | ) | $ | 17.8 | $ | 17.4 | $ | 16.9 |
Pension benefits |
Health
care and
other benefits
|
||||||||||
2007 |
2006
|
2007
|
|
2006 | |||||||
Discount
rate
|
6.25 | % | 5.75 | % | 6.25 | % | 5.75 | % | |||
Rate
of compensation increase
|
3.75 | 3.75 | 3.75 | 3.75 |
Pension
benefits
|
Health
care and other benefits
|
|||||||||||||||||||||||
2007
|
2006
|
2005
|
2007
|
2006
|
2005
|
|||||||||||||||||||
Discount
rate
|
5.75 | % | 5.50 | % | 5.75 | % | 5.75 | % | 5.50 | % | 5.75 | % | ||||||||||||
Expected
return on assets
|
8.50 | 8.50 | 8.50 | 8.50 | 8.50 | 8.50 | ||||||||||||||||||
Rate of compensation increase | 3.75 | 3.75 | 4.00 | 3.75 | 3.75 | 4.00 |
2007
|
2006
|
|||||||
Health
care cost trend rate
|
9.0 | % | 9.5 | % | ||||
Rate
to which the cost trend rate is assumed to decline (the ultimate
rate)
|
5.0 | % | 5.0 | % | ||||
Years
to reach ultimate rate
|
6 | 5 |
2007
|
2006
|
2005
|
||||||
Health
care cost trend rate
|
9.5
|
% |
9.5
|
% |
9.5
|
% | ||
Rate
to which the cost trend rate is assumed to decline (the ultimate
rate)
|
5.0
|
% |
5.0
|
% |
5.0
|
% | ||
Years
to reach ultimate rate
|
5
|
5
|
4
|
One-percent
|
||||||||
Increase
|
Decrease
|
|||||||
Effect
on total of service and interest cost components
|
$ | 1.1 | $ | (1.0 | ) | |||
Effect on benefit obligation | 18.3 | (15.6 | ) |
Target
|
Percentage
of plan assets
at
October 1
|
||||||||||
Asset
category
|
allocation
|
2007
|
2006
|
||||||||
Equity
securities
|
69
|
% | 69 | % | 69 | % | |||||
Debt
securities
|
31
|
31 | 31 | ||||||||
100 | % | 100 | % | 100 | % |
Twelve
months
ending
October 1
|
Pension
benefits
|
Health
care
and
other
benefits
|
Expected
Medicare
subsidy
|
|||||||||
2008
|
$ | 17.9 | $ | 11.7 | $ | (1.3 | ) | |||||
2009
|
18.5 | 12.6 | (1.4 | ) | ||||||||
2010
|
18.9 | 13.5 | (1.6 | ) | ||||||||
2011
|
20.1 | 14.3 | (1.6 | ) | ||||||||
2012
|
21.3 | 15.0 | (1.7 | ) | ||||||||
2013-2017
|
136.7 | 84.2 | (9.8 | ) |
2007
|
2006
|
2005
|
||||||||||
Bundled
sales
|
$ | 2,265.2 | $ | 2,087.8 | $ | 2,546.7 | ||||||
Transportation
|
155.9 | 158.8 | 151.9 | |||||||||
Revenue
taxes
|
149.6 | 147.7 | 156.4 | |||||||||
Other
|
56.8 | 58.0 | 54.6 | |||||||||
$ | 2,627.5 | $ | 2,452.3 | $ | 2,909.6 |
Purchase
obligations
|
Operating
leases
|
Other
long-term obligations
|
||||||||||
2008
|
$ | 11.9 | $ | 1.1 | $ | .5 | ||||||
2009
|
11.7 | .5 | .5 | |||||||||
2010
|
11.7 | .4 | .5 | |||||||||
2011
|
11.7 | .4 | .2 | |||||||||
2012
|
5.3 | .4 | .2 | |||||||||
After
2012
|
2.9 | 8.9 | 1.4 | |||||||||
$ | 55.2 | $ | 11.7 | $ | 3.3 |
Quarter
ended
|
||||||||||||||||
Mar.
31
|
June
30
|
Sept.
30
|
Dec.
31
|
|||||||||||||
2007
|
||||||||||||||||
Operating
revenues
|
$ | 1,208.4 | $ | 431.4 | $ | 238.9 | $ | 748.8 | ||||||||
Operating
income
|
51.1 | 12.2 | 5.4 | 27.7 | ||||||||||||
Net
income (loss)
|
38.4 | 4.8 | (2.8 | ) | 25.9 | |||||||||||
2006
|
||||||||||||||||
Operating
revenues
|
$ | 1,210.8 | $ | 338.1 | $ | 226.7 | $ | 676.7 | ||||||||
Operating
income
|
42.7 | 13.3 | 7.2 | 35.0 | ||||||||||||
Net
income (loss)
|
30.2 | 8.2 | (1.6 | ) | 21.8 |
1.
|
Pertain
to the maintenance of records that in reasonable detail accurately and
fairly reflect the transactions and dispositions of the assets of the
company;
|
2.
|
Provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the company
are being made only in accordance with authorizations of management and
directors of the company; and
|
3.
|
Provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the company’s assets that
could have a material effect on the financial
statements.
|
Item
9B.
|
Fee
Category
|
2007
|
2006
|
||||||
Audit
fees
|
$ | 1.4 | $ | 1.5 | ||||
Audit-related
fees
|
.1 | .1 | ||||||
Total
fees
|
$ | 1.5 | $ | 1.6 |
|
1)
|
Financial
Statements:
|
|
2)
|
Financial
Statement Schedules:
|
Schedule
|
||
Number
|
Page
|
|
24
|
||
II
|
54
|
|
Schedules
other than those listed are omitted because they are not
applicable.
|
|
3)
|
Exhibits
Filed:
|
Nicor
Gas Company
|
||
Date
February 25,
2008
|
/s/
KAREN K. PEPPING
|
|
Karen
K. Pepping
|
||
Vice
President and Controller
|
||
(Principal
Accounting Officer and
|
||
Duly
Authorized Officer)
|
||
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report
has been signed below
by
the following persons on behalf of the registrant and in the capacities
indicated on February 25, 2008.
|
||
Signature
|
Title
|
|
/s/ RUSS M.
STROBEL
|
||
Russ
M. Strobel
|
Chairman,
President and
|
|
(Principal
Executive Officer)
|
Chief
Executive Officer
|
|
/s/ RICHARD L.
HAWLEY
|
||
Richard
L. Hawley
|
Executive
Vice President and
|
|
(Principal
Financial Officer)
|
Chief
Financial Officer
|
|
/s/ KAREN K.
PEPPING
|
||
Karen
K. Pepping
|
Vice
President and Controller
|
|
(Principal
Accounting Officer)
|
||
ROBERT
M. BEAVERS, JR.*
|
Director
|
|
BRUCE
P. BICKNER*
|
Director
|
|
JOHN
H. BIRDSALL, III*
|
Director
|
|
NORMAN
R. BOBINS*
|
Director
|
|
THOMAS
A. DONAHOE*
|
Director
|
|
BRENDA
J. GAINES*
|
Director
|
|
RAYMOND
A. JEAN*
|
Director
|
|
DENNIS
J. KELLER*
|
Director
|
|
R.
EDEN MARTIN*
|
Director
|
|
GEORGIA
R. NELSON*
|
Director
|
|
JOHN
RAU*
|
Director
|
|
JOHN
F. RIORDAN*
|
Director
|
|
*
|
By
/s/ RICHARD L.
HAWLEY
|
|
Richard
L. Hawley
|
||
(Attorney-in-fact)
|
Exhibit
|
||
Number
|
Description of
Document
|
|
3.01
|
*
|
Restated
Articles of Incorporation of the company as filed with the Illinois
Secretary of State on July 21, 2006. (File No. 1-7296, Form
10-Q for June 30, 2006, Exhibit 3.01.)
|
3.02
|
*
|
Nicor
Gas Company Amended and Restated By-laws effective as of December 1,
2007. (File No. 1-7296, Form 8-K for November 29, 2007, Exhibit
3.1.)
|
4.01
|
*
|
Indenture
of Commonwealth Edison Company to Continental Illinois National Bank and
Trust Company of Chicago, Trustee, dated as of January 1,
1954. (File No. 1-7296, Form 10-K for 1995, Exhibit
4.01.)
|
4.02
|
*
|
Indenture
of Adoption of the company to Continental Illinois National Bank and Trust
Company of Chicago, Trustee, dated February 9, 1954. (File No.
1-7296, Form 10-K for 1995, Exhibit 4.02.)
|
4.03
|
*
|
Supplemental
Indenture, dated February 15, 1998, of the company to Harris Trust and
Savings Bank, Trustee, under Indenture dated as of January 1,
1954. (File No. 1-7296, Form 10-K for 1997, Exhibit
4.19.)
|
4.04
|
*
|
Supplemental
Indenture, dated February 1, 1999, of the company to Harris Trust and
Savings Bank, Trustee, under Indenture dated as of January 1,
1954. (File No. 1-7296, Form 10-K for 1998, Exhibit
4.19.)
|
4.05
|
*
|
Supplemental
Indenture, dated February 1, 2001, of the company to BNY Midwest Trust
Company, Trustee, under Indenture dated as of January 1,
1954. (File No. 1-7296, Form 10-K for 2000, Exhibit
4.17.)
|
4.06
|
*
|
Supplemental
Indenture, dated May 15, 2001, of the company to BNY Midwest Trust
Company, Trustee, under Indenture dated as of January 1,
1954. (File No. 1-7296, Form 10-Q for June 2001, Exhibit
4.01.)
|
4.07
|
*
|
Supplemental
Indenture, dated August 15, 2001, of the company to BNY Midwest Trust
Company, Trustee, under Indenture dated as of January 1,
1954. (File No. 1-7296, Form 10-Q for September 2001, Exhibit
4.01.)
|
4.08
|
*
|
Supplemental
Indenture, dated December 1, 2003, of the company to BNY Midwest Trust
Company, Trustee, under Indenture dated as of January 1,
1954. (File No. 1-7296, Form 10-K for 2003, Exhibit
4.09.)
|
4.09
|
*
|
Supplemental
Indenture, dated December 1, 2003, of the company to BNY Midwest Trust
Company, Trustee, under Indenture dated as of January 1,
1954. (File No. 1-7296, Form 10-K for 2003, Exhibit
4.10.)
|
4.10
|
*
|
Supplemental
Indenture, dated December 1, 2003, of the company to BNY Midwest Trust
Company, Trustee, under Indenture dated as of January 1,
1954. (File No. 1-7296, Form 10-K for 2003, Exhibit
4.11.)
|
4.11
|
*
|
Supplemental
Indenture, dated December 1, 2006, of Nicor Gas to BNY Midwest Trust
Company, Trustee, under Indenture dated as of January 1,
1954. (File No. 1-7296, Form 10-K for 2006, Exhibit
4.11.)
|
Exhibit
|
||
Number
|
Description
of
Document
|
|
10.01
|
*
|
Amendment
and Restatement of Nicor Gas Supplementary Retirement
Plan. (File No. 1-7297, Form 10-Q for March 2000, Nicor Inc.,
Exhibit 10.01.)
|
10.02
|
*
|
Directors
Compensation. (File No. 1-7296, Form 8-K for September 21,
2005, Northern Illinois Gas Company.)
|
10.03
|
*
|
5-Year
Credit Agreement dated as of September 13, 2005. (File No.
1-7296, Form 10-Q for September 30, 2005, Northern Illinois Gas Company,
Exhibit 10.03.)
|
10.04
|
*
|
First
Amendment to the Northern Illinois Gas Company Supplemental Retirement
Plan. (File No. 1-7296, Form 10-K for December 31, 2005, Northern Illinois
Gas Company, Exhibit 10.05.)
|
10.05
|
*
|
2006
Nicor Gas Annual Incentive Compensation Plan for
Officers. (File No. 1-7296, Form 10-Q for March 31, 2006,
Northern Illinois Gas Company, Exhibit 10.01.)
|
10.06
|
*
|
1993
Interim Cooperative Agreement between Commonwealth Edison Company and
Northern Illinois Gas Company. (File No. 1-7296, Form 10-Q for March 31,
2006, Northern Illinois Gas Company, Exhibit 10.02.)
|
10.07
|
*
|
Amendment
No. 1 to the 1993 Interim Cooperative Agreement. (File No. 1-7296, Form
10-Q for March 31, 2006, Northern Illinois Gas Company, Exhibit
10.03.)
|
10.08
|
*
|
Amendment
No. 2 to the 1993 Interim Cooperative Agreement. (File No.
1-7296, Form 10-Q for March 31, 2006, Northern Illinois Gas Company,
Exhibit 10.04.)
|
10.09
|
*
|
Amendment
No. 3 to the 1993 Interim Cooperative Agreement. (File No.
1-7296, Form 10-Q for March 31, 2006, Northern Illinois Gas Company,
Exhibit 10.05.)
|
10.10
|
*
|
Second
Amendment to the 5-Year Credit Agreement dated as of October 26,
2006. (File No. 1-7296, Form 10-Q for September 30, 2006,
Northern Illinois Gas Company, Exhibit 10.02.)
|
10.11
|
*
|
2007
Nicor Gas Annual Incentive Compensation Plan for
Officers. (File No. 1-7296, Form 10-Q for March 31, 2007,
Northern Illinois Gas Company, Exhibit 10.01.)
|
10.12
|
*
|
Nicor
Gas Directors’ Deferred Compensation Plan, as amended and restated
effective January 1, 2008. (File No. 1-7296, Form 10-Q for June
30, 2007, Northern Illinois Gas Company, Exhibit
10.01.)
|
10.13
|
*
|
Memorandum
of Understanding between Nicor Gas and Commonwealth Edison
Company. (File No. 1-7296, Form 10-Q for June 30, 2007,
Northern Illinois Gas Company, Exhibit 99.01.)
|
10.14
|
*
|
210-Day
Credit Agreement dated as of October 18, 2007. (File No.
1-7296, Form 10-Q for September 30, 2007, Northern Illinois Gas Company,
Exhibit 10.01.)
|
10.15
|
Exhibit
|
||
Number
|
Description of
Document
|
|
12.01
|
||
23.01
|
||
24.01
|
||
31.01
|
||
31.02
|
||
32.01
|
||
32.02
|
*
|
These
exhibits have been previously filed with the Securities and Exchange
Commission as exhibits to registration statements or to other filings with
the Commission and are incorporated herein as exhibits by
reference. The file number and exhibit number of each such
exhibit, where applicable, are stated, in parentheses, in the description
of such exhibit.
|
1.
|
Definitions
|
1.1. The following terms, as used anywhere in this Agreement, have the same meaning that they have in the ICA: “ Shared Costs,” “ Final Cost Allocation,” and “ Coordinator/Utility.” |
2.
|
Final
Cost Allocation
|
|
2.1. Except as specified in
paragraph 2.3, w
ith
respect to the Sites listed on Attachment A to this Agreement, the Final
Cost Alloca
tion shall
be and shall result in Nicor being responsible for 51.73 percent, and
ComEd being responsible for 48.27 percent, of any and all past and future
Shared Costs.
|
|
2.2. Except as specified in
paragraph 2.3, w
ith
respect to the Sites listed on Attachm
ent B
to this Agreement
, the Final Cost Allocation shall
be and shall result in Nicor being responsible for 0 percent, and ComEd
being responsible for 100 percent, of any and all past and future Shared
Costs. ComEd will become the Coordinator/Utility at
a
ny and all Sites
listed on Attachment B other than the
S
ite described on Attachment B as
“
MGP Site at Clinton
and Jackson, Ottawa,
Illinois.”
|
|
2.3. The parties recognize
that there may be
Shared Costs that do not relate
exclusively either to the Sites listed on
Attachment A or to the Sites
listed on Attachment B, but rather relate to the Utilities
’
MGP remediation program in general
(“
Program
Costs”
)
. Program Costs could
include, by way of example and without limitation, costs associated with
site prioritization
,
costs associated with jointly owned equipment
and costs associated with
producing documentation to provide general instructions to contractors
relating to the site
investigations and remediations.
The
Final Cost Allocation shall be and
shall result in
Nicor
being responsible for 50 percent, and ComEd being responsible for 50
percent, of any and all past and future Program
Costs.
|
|
2.4. On the date of ICC
approval of this Agreement, to the extent that either Utility has paid
more or less than the amounts dete
rmined by the percentages in
paragraphs 2.1 through 2.3 of this Agreement, appropriate credits and
debits, if required, will be made
promptly
to reflect the agreed upon
percentage of each Utility
’
s Final Cost Allocation, as
specified in paragraphs 2.1 thro
ugh 2.3. These credits
and debits will be reflected in invoices for future remediation costs at
Sites listed on Attachment
A.
|
3.
|
ICC
Approval
|
|
3.1. This
Agreement
, including
the prudence and
reasonableness of
the
Final Cost Allocations set forth in section 2 and t
he indemnities set forth in
section 5 below,
is
subject to and contingent upon approval by the
ICC.
|
|
3.2. The Utilities agree to
use their best efforts, and to act in good faith, promptly to seek and
obtain ICC approval of this Agreement
, including
the Final C
ost Allocations and indemnities
set forth herein
.
|
|
3.3. In the event that the
ICC does not approve this Agreement,
including
the Final Cost Allocations and
indemnities set forth herein,
this Agreement and the MOU shall
be void
,
but the ICA shall remain in full
force and
effect
.
|
|
3.4. In the event that the
ICC approves this Agreement,
including
the Final Cost Allocations and
indemnities set forth herein
,
(a) this Agreement shall supersede
the MOU, (b) this Agreement shall control in the event of any conflict
between t
his
Agreement and the MOU
or any conflict between this
Agreement and the ICA
, and (c) the date of such
approval shall be the Effective Date of this
Agreement.
|
|
3.5. If, before the ICC
approval
s
contemplated by this
Agreement become final and non-appealable, the
Illinois General Assembly approves
a change in Illinois law such that either party reasonably anticipates
that it may be prevented by such change from obtaining, in whole or in
part, recovery from customers of Shared Costs, then either party so
potentiall
y
affected by such
legislative action shall have the right to terminate the MOU and this
Agreement, by giving notice of such termination to the other party within
thirty (30) days of such change. In the event of such
termination, neither Utility shall hav
e
any continuing obligation under
either the MOU or this
Agreement.
|
4.
|
Pending
Arbitration
|
|
4.1. Upon execution of this
Agreement, the Utilities will jointly request that the stay of Arbitration
be continued pending the ICC
’
s review and approval of this
Agreement
,
including
the Final Cost Allocations and the
indemnities set forth
herein.
|
|
4.2. If and when a final
Order of the ICC approving this Agreement
,
including
the Final Cost Allocations and
indemnities set forth herein
,
becomes non-appealable, the
Utilities will re
quest
that the Arbitration be dismissed
with prejudice.
|
|
4.3. In the event the ICC
does not approve
this Agreement,
including
the Final Cost
Allocations and indemnities set forth herein,
or in the event of termination of
this Agreement as provided in paragraph
3.5, either Utility may reinstate
the Arbitration, in which case neither Utility will be deemed to have
waived any claim, right, or defense as a result of the MOU or this
Agreement, and neither the MOU nor this Agreement nor any communication or
document
related to either will be
admissible in any way in any reinstated
Arbitration.
|
5.
|
Release
and Indemnity
|
|
5.1. Effective upon a final
Order of the ICC approving this Agreement,
including
the Final Cost Allocations and
indemnities set forth herein
,
becoming non-appea
lable, each Utility releases the
other from
all claims
for liability with respect to Shared Costs (other than as may arise out of
the agreed Final Cost Allocation
s
described in
s
ection 2
and except as may be necessary to
effectuate the indemnities provided
in paragraphs 5.2 and
5.3
).
|
|
5.2. Effective upon a final
Order of the ICC approving
this Agreement,
including
the Final Cost Allocations and
indemnities set forth herein
,
becoming non-appealable,
e
ach Utility hereby indemnifies and
agrees to defend and hold har
mless the other
against
liability, including but not
limited to any liability arising out of or relating to remediation, to any
third party arising out of or relating to any of the Sites listed on
Attachment A,
for
costs that are
recoverable through
the in
demnifying party
’
s rider
|
described hereafter (as such rider(s) may be amended from time to time): ComEd ’ s Rider ECR (Ill. C. C. No. 4, sheet nos. 438 through 440.2, filed Aug. 11, 2006) or Nicor ’ s Rider 12 (Ill. C. C. No. 16, sheet nos. 68-70, filed Sept. 30, 2005) . The indemnification provided in this paragraph 5.2 is limited to the amount necessary to allow the Utilities to share in such third-party liability in the same proportion as the Final Cost Allocations set out in paragraph 2.1 . The indemnificat ion provided in this paragraph is in addition to any other indemnification rights, common law or otherwise, that the parties may have. | |
|
5.3. Effective upon a final
Order of the ICC approving this Agreement,
including
the Final Cost Allocations and
indemnities se
t forth
herein
,
becoming non-appealable,
ComEd hereby
indemnifies and agrees to defend and hold harmless Nicor
against
liability,
including but not limited to any
liability arising out of or relating to remediation, to any third party
arising out of or rel
ating to any of
the Sites
l
isted on Attachment B
, for costs that are recoverable
through ComEd
’
s Rider ECR (Ill. C. C. No. 4,
sheet nos. 438 through 440.2, filed August 11, 2006), as such rider may be
amended from time to time.
The indemnification
provid
ed in this
paragraph is in addition to any other indemnification rights, common law
or otherwise, that the parties may
have.
|
6.
|
Entire
Agreement.
This Agreement and the
Attachments to this Agreement (which are part of this Agreement)
constitute the entire un
derstanding of the Utilities with
respect to this Agreement. No modification may be made to this
Agreement except one signed by both Utilities that expressly states that
it modifies this Agreement.
|
7.
|
Successors
and Assigns.
This Agreement shall
be binding
upon the
successors and assigns of the Utilities; provided that
neither
Utility can assign its rights
under this Agreement without the other Utility
’
s
consent.
|
8.
|
Applicable
Law.
This
Agreement shall be interpreted under the laws of the State of
Illinois.
|
9.
|
Dispute
Resolution
.
The parties agree to attempt to
resolve any dispute
arising out of or relating to this
Agreement or its breach
through good faith
negotiation. If good faith negotiation fail
s
to resolve the dispute,
then
the
parties agree to submit
the
dispute
to non-binding mediation and
acknowledge that the role of the mediator is not to render a decision, but
to assist the parties in reaching a mutually acceptable
resolution. No party shall be bound by anything said or done in
the course of medi
ation other than
through
an agreement in writing
executed by both
Utilities
. If mediation fails to
settle the
dispute
,
then the
parties agree that the dispute
shall be settled by
arbitration
under and in accordance with
the
ICA
.
|
10.
|
Nonwaiver.
The
Utiliti
es do not
admit liability at any of the Sites listed in Attachments A or
B. Except as otherwise provided in this Agreement, the
Utilities do not waive any rights or defenses, including rights to seek
recovery of any costs that are recoverable through the
i
r respective
environmental-cost-recovery riders,
as described in paragraph
5.2.
|
11.
|
Method
of Execution.
This Agreement may be
executed in multiple counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and
th
e same
agreement.
|
|
1.
|
Aurora Gas Light Company, River
St. at North Avenue Bridge,
Aurora
|
|
2.
|
Belvidere Gas, Light & Fuel,
Locust Street, Belvidere
|
|
3.
|
Chicago Heights
Gas Company, 17th & State
Street, Chicago Heights
|
|
4.
|
Cicero gas Company, Lombard &
Garfield, Oak Park
|
|
5.
|
Coal Products manufacturing
Company, North Broadway,
Lockport
|
|
6.
|
Freeport Gas, Light & Coke
Company, Liberty & Jackson St.,
Freeport
|
|
7.
|
Geneseo Electric Light &
G
as Company, Oakwood
& First St., Geneseo
|
|
8.
|
Illinois Northern Utility Company,
Market & 14th, DeKalb
|
|
9.
|
Illinois Northern Utilities
Company, 227 Miller, Sterling
|
10. | Joliet Gaslight Company, Station B, North Broadway & Ingalls St., Joliet | |
11. | Kankakee Gas Company, Birch & Harrison St., Kankakee | |
12. | LaGrange Gas Company, 47th & Bluff St., LaGrange | |
13. | Lemont Gas, Light Company, Main & Lockport Rd., Lemont | |
14. | Lincoln Water, Light & Gas Company, Sangamon & Dacatur St., Lincoln | |
15. | Lockport Gas Company, 17th & I & M Canal, Lockport | |
16. | Mendota Gas Company, Fifth St. & Ninth Ave., Mendota | |
17. | Morris gas Company, Nettle & Jackson St., Morris | |
18. | Morrison Gas & Electric, Market & S. Orange, Morrison |
19. | Northwestern Gas, Light & Coke Company, 912 Clark St., Evanston | |
20. |
Northwestern Gas, Light & Coke
Company
,
Map
le & Vermont,
Blue Island
|
|
21. |
Northwestern Gas, Light & Coke
Co./Niles Center Station, Oakton St. & McCormick Blvd.,
Skokie
|
|
22. |
Ottawa Gas, Light & Coke
Company, Illinois & Walker St., Ottawa
|
|
23. |
Pontiac Light & Water Company,
Vermillion & Water St., Pontiac
|
|
24. |
Streator
Gas, Light & Coke Co., Water
St. & Vermillion Rr.,
Streator
|
|
1.
|
MGP Site on Coal Gas Road,
DuQuoin, Illinois
|
|
2.
|
MGP Site on Bluff Street, Joliet,
Illinois
|
|
3.
|
MGP Site on Center Street,
Geneseo, Illinois
|
|
4.
|
MGP Site at Clinton and Jackson,
Ottawa, Illino
is
|
|
5.
|
Dixon I (2nd
St.)
|
|
6.
|
Dixon II (River &
Perry)
|
|
7.
|
DuQuoin
(Chestnut)
|
|
8.
|
Elgin
TDC-570-0044
|
|
9.
|
Kenilworth
|
10. | Mendota (Main St.) | |
11. | Murphysboro I (Walnut) | |
12. | Murphysboro II (Big Muddy) | |
13. | Rockford (Avon & Cedar) | |
14. | Rockford II (Mulberry) |
Date:
|
February 25, 2008
|
/s/
RUSS M. STROBEL
|
||
Russ
M. Strobel
|
||||
Chairman,
President and Chief Executive Officer
|
Date:
|
February 25, 2008
|
/s/
RICHARD L. HAWLEY
|
||
Richard
L. Hawley
|
||||
Executive
Vice President and Chief Financial Officer
|
Dated:
|
February 25, 2008
|
/s/
RUSS M. STROBEL
|
||
Russ
M. Strobel
|
||||
Chairman,
President and Chief Executive Officer
|
Dated:
|
February 25, 2008
|
/s/
RICHARD L. HAWLEY
|
||
Richard
L. Hawley
|
||||
Executive
Vice President and Chief Financial Officer
|